Omaha Real Estate: 5 Reasons Why You Should Not For Sale By Owner!

5 Reasons Why You Should Not For Sale By Owner!

5 Reasons Why You Should Not For Sale By Owner!

5 Reasons Why You Should Not For Sale By Owner! | MyKCM

In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their Omaha homes on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers 

Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 16% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the homes they actually purchased?

  • 51% on the internet
  • 34% from a Real Estate Agent
  • 8% from a yard sign
  • 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

3. There Are Too Many People to Negotiate With 

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale by Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years. 

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent 

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $185,000, while the typical house sold by an agent sells for $245,000. This doesn’t mean that an agent can get $60,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, let’s get together and discuss the options available in your market today.

 

Comments

Your source, Keeping Current Matters, continues to put this information out every few months.  

Sellers go FSBO because they do not perceive the value of the commission being charged.  It is about the money. The industry needs to be open to providing alternative solutions to meet their needs.  Flat Fee Listings, Hourly Fee For Services, and Real Estate Consulting offer the seller additional choices to meet those needs while saving their equity.  All of the issues mentioned can be addressed by a real estate broker/agent who is open to alternatives beyond the legacy commission compensation system.

As to the last item, Sellers Net More Using a Real Estate Agent/Broker, this is repeated often but is not supported by reality.  Will a real estate broker really generate $60k more on a single house?  No.  Quoting from above, "This doesn’t mean that an agent can get $60,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points.".  Large macroeconomic data (the United States FSBO sales data) does not support the local market; this is a logical fallacy being used to mislead and confuse sellers.

An economic study, which controlled for the local market, specific to Madison, WI, showed there was no difference between sold pricing for FSBO/agents. Certainly not what the NAR and real estate sales industry want to hear, let alone disclose.  Note, the study also has some caveats to the conclusions.  

An anecdotal example, actual sales activity: Two similar homes on the same street sold within weeks (33 days) of each other; one FSBO, one agent represented.  House 1 FSBO, 1,140 sq ft, 2 bed 2 baths sold for $224,000, sold June 1.  House 2 Agent, 2 bed, 2 baths, 1,190 sq ft, sold for $224,000, sold April 28.  We will even assume the FSBO buyer had representation, so the only commission savings is on the listing side.  For example’s sake, assume 2.5% listing commission.  FSBO property netted $5,600 more.  Certainly not $60,000 more.  And this is not the exception to the rule. I have seen many situations experience similar equity savings.

Posted by Mel Ahrens, MBA, Kelly Right Real Estate, Customized Choices for your Real Estate Needs (Kelly Right Real Estate) over 1 year ago

Participate